France rejects Cong's Rafale deal scam charge, Reliance Defence may sue

New Delhi: The Rafale fighter aircraft deal was in India's interest, French diplomatic sources asserted on Wednesday, a day after the Congress alleged that the BJP government was buying 36 aircraft from the French firm at a highly inflated price.

French sources said the military jet was selected for its "outstanding performance" and "competitive price", while refusing to directly counter the Congress' allegation, terming it a "domestic political issue".

"Rafale has been selected for its outstanding performance and competitive price, following a transparent procedure. The offset clause is going to help develop the defence industry in India," the sources said, adding that there was a need to "check the facts" before making claims on the contrary.

Under the agreement, the French side has made a 30-per cent offset commitment for military aerospace research and development programmes and the rest 20 per cent for manufacturing the components of the Rafale aircraft here.

Asked whether France was keen on augmenting the deal, the sources maintained that it was up to India, but added that the focus currently was on delivering the 36 aircraft on time.

"If there are further needs, we will be more than happy to propose our cooperation. But that is not for us to decide and we are not focusing on it currently," they said.

The Congress had on Wednesday alleged that the Rafale deal amounted to compromising on national interest and security and promoted "crony capitalism", while causing a loss to the public exchequer.

The opposition party had also alleged that the aircraft were being purchased at much higher rates than what was decided after the completion of the tender process under the previous UPA government.

Meanwhile, Anil Ambani's Reliance Defence Limited has threatened to sue the opposition party if it does not retract its charge, according to a report in NDTV.

Reliance Defence said, "Government policy issued on 24 June 2016 allows for 49 per cent FDI in the Defence Sector under the automatic route, without any prior approval. No approvals from the Union Cabinet or CCS were required for the formation of the aforesaid Joint Venture company under the automatic route."